How it is that Apple and now Google have become the destinations and marketplaces for video on the web? They’re the new networks using the same currency — video — as TV has for years. It’s because they’ve not been constrained by old media thinking…

…While traditional media scrambles to protect and incrementally improve its bottom line, companies like YouTube, Google and Apple are pursuing new opportunities focused on the user. And that’s what sets them apart.

Michael Arrington at TechCrunch raises interesting issues about how Rupert Murdoch could upset the YoogleTube juggernaut:

Fox is in a very unique position vis-à-vis this deal. News Corp chief operating officer Peter Chernin recently told investors that 60-70% of YouTube traffic comes from MySpace. While direct integration with Google could certainly make up for part of this traffic were MySpace to shut off YouTube access, it would still be a huge blow. And Fox is also the owner of much of the copyrighted material contained on YouTube.

Google is in a precarious position. Fox could, subject to the terms of their agreement with Google, take their search business to Yahoo or Microsoft, who would be eager to take the deal. They could bury YouTube in copyright litigation which at the very least would require YouTube to pull down Fox content. And finally, MySpace could flip a switch and kill much of YouTube’s current traffic.

2) Google wants assets at the edges of the value chain which can exert market power against 1.0 publishers – just like it’s doing in book search.

The more of these assets it has across media markets, the greater economies of scope it can ultimately realize; the flipside of these scope economies is, of course, the more market power it can exert.

In other words, Google’s goal is to redesign a more efficient value chain.

3) Google Video failed miserably.

Umair notes that the bottom line is a simple question: Do “you believe tomorrow’s attention is worth 10-20x today’s revenues? Google does – and that in itself is a data point that beancounters across industries will be chewing on for quite a while to come.”

Maybe now we can all stop focusing on minutia M&A stuff and focus on bigger, meatier issues like where social media is all going and what it means. I am reluctant to even link to this because it’s been written about to death. It’s a deal. Now it’s done. Woo hoo. Good for Google. Good for YouTube. Great for social media. Even better for the blogosphere because we won’t be talking about this much longer.

Folks, this is a very big deal, no matter how you look at it. It gives Google a big footprint inside the social media tent, something it hasn’t been able to do on its own. I think that’s significant, because the months ahead are going to be about redefining community — something that’s at the top of my list for 2007 predictions.

To local broadcasters — those people, as Cory mentioned above, who USED to own the video niche — it means getting pushed further down the value chain, to the expensive “content creator only” position. Local stations are still too busy trying to beat each other in the “real world” to see that forcing people to their own portal was never a good consumer choice for viewing video. Why should I, after all, visit four or five websites to view the day’s news? And absent a single local platform for viewing all local videos, people will continue to use YouTube and a hundred clones. And so it goes…

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I blog for two reasons. One, it is the greatest method ever created to challenge my own assumptions, something that I believe is necessary for anyone who wishes a seat at the discussion table... Read More…